Vejtasa: Real estate could see boost in ’13

Friday

Mar 15, 2013 at 12:00 PM

Coldwell Banker Best Reality realtor Kathy Vejtasa gave a brief presentation Thursday to the Ridgecrest Exchange Club on the overall picture of the valley's real estate health, in addition to some financial tips.

By Jack Barnwelljbarnwell@ridgecrestca.com

Coldwell Banker Best Reality realtor Kathy Vejtasa gave a brief presentation Thursday to the Ridgecrest Exchange Club on the overall picture of the valley's real estate health, in addition to some financial tips.“Our rates have been the lowest they have ever been,” Vejtasa said, indicating it was a good time to buy for those who could afford it.Currently, the Federal Reserve allows banks to borrow at quarter percent (.25) interest, with lenders able to field loans at an increased interest rate, usually around 3.75 percent.The national average for a 30-year fixed mortgage rate is 3.63 percent, according to a Freddie Mac statement released Thursday.“I've been in real estate 33 years and it's the lowest I've ever seen them,” Vejtasa saidShe said there was a reason behind the wide range of interest rates.“The reason for the 3.5 percent difference is that it is a bank's profit and overhead,” she said. “That allows the banks to loan at a very reasonable rate.”She said the buyer's dilemma right now, at least as far as the valley was concerned, was whether to buy now in light of potential furloughs by the Navy regardless of whether rates were still low.“The buyer's dilemma is: 'With what's happening on base, I may be decreasing my income by 20 percent, should I buy and worry about that 20 percent decrease later and take advantage of that low interest rate now?'” she said.Vejtasa said there was a possibility the Fed's loan rate could jump to 1.25 percent in a year if the economy kept on track.“That's still very low and reasonable but it provides a dilemma for the buyers,” she said. “Should they buy now or hold?”One recommendation she offered was to aim for a house at 80 percent of what could be afforded on a full time salary.Overall, total homebuyer debt – including taxes, principle, interest and any home owners associations fees – should not exceed 43 percent of a person's income.Vejtasa pointed out one of the reasons the housing market tanked was because the lax monitoring on lending.“Banks were qualifying people for more than they could afford and people were gambling on homes, particularity in Los Angeles County and Orange County,” she said.She said home values would not have been so affected if it hadn't had happened in the larger cities.“It wasn't until our property values went down that we had problems,” she said.Buyer Beware Scams“Scams are rampant,” Vejtasa said. One type of scam involves advanced fees.She said it was still an occurrence, especially among immigrant populations.“You should run if someone asks for an advanced fees because it is illegal,” Vejtasa said. “Realtors cannot do that.”The same applied for people who suggested home owners stop paying their mortgage or surrender their home title.Vejtasa recalled trying to talk two people out of surrendering their title to another person, all on the pretense of selling the home back to the owners at a lower market rate.“They surrendered their title and were never able to get their house back,” Vejtasa said.Ridgecrest's Real Estate HealthVejtasa shed some light on the recent history of the city's home sales, indicating it had been in flux since the real estate decline began in 2006.In the last three-month period in 2005, Vejtasa pointed the sales rate for Ridgecrest was 156 homes.“In 2006 was when it fell out,” she said, with 88 homes sold in the last three months of that year.The number dropped to 64 homes in 2007, rose to 80 homes in 2008 and 108 in 2009, down to 91 and 85 in 2010 and 2011 respectively. The last quarter report for 2012 was 86 homes sold.Average home prices in 2005 were $192,309, before rising in 2006.In the six-year span between 2006 and 2012, the average home price in Ridgecrest fell from $227,494 to $148,087 during the last quarter of every year.She said Ridgecrest home prices overall went down 34 percent since 2005.“Bakersfield had more home repos than any other area and they are rebounding very quickly,” Vejtasa said. “We haven't yet, but we are starting to.”In that, she said 2013 might “be the year of recovery” for the real-estate market.